Fixed or variable?

happihorse

I am a first time buyer with a 30% deposit and I am hoping to purchase a house within the next fewe months. I have been looking at mortages and, whilst I understand the differences, I am not sure whether I would be better to go for a fixed or variable one.

I like the security of a fixed one but don't want to pay too much more.

I have found a deal for a 7 year fixed rate of 3.69% which really appeals but is quite a bit higher than the 2 year fixed one for 2.39% and I think I could get a variable one for around the 2.0% mark at a push.

Can anyone off any advice or explain the pro's and con's of each?

dimbo61

We know nothing about you!
A fixed might be just want you want and need but it may also be a total disaster
rates have never been this low but I do know that 2 years will fly past and interest rates may not be 0.5% BOE base rate in 2 years.
Now if you plan on staying in your new home for a least 5 years then a 5/7 year fix might suit you but why not see a " whole of market mortgage broker " who is an expert in this field.
He/she can talk to you and your OH about income,savings,LTV,pension, plans, kids ETC and help get you the best deals on the mortgage market

Thrugelmir

happihorse wrote: »

I am a first time buyer with a 30% deposit and I am hoping to purchase a house within the next fewe months. I have been looking at mortages and, whilst I understand the differences, I am not sure whether I would be better to go for a fixed or variable one.

I like the security of a fixed one but don't want to pay too much more.

I have found a deal for a 7 year fixed rate of 3.69% which really appeals but is quite a bit higher than the 2 year fixed one for 2.39% and I think I could get a variable one for around the 2.0% mark at a push.

Can anyone off any advice or explain the pro's and con's of each?

Which lender are you looking at for a 2% variable rate?

There's no right or wrong to fixing your mortgage. Ultimately its a gamble. As no-one can forecast changes in future rates.

While fixed rates may appear attractive always look at the follow on rate after the fixed term has ended.

Would you prefer the security of knowing what your monthly outgoing is? That's often a primary question when making the choice of fixed or variable.

If you choose the variable route then overpaying from the outset is advisable. Interest rates longer term will rise. Paying off capital earlier will reduce the impact.